Audioboom Group PLC (LON: BOOM) 

Audioboom Group PLC is an FTSE AIM All-Share listed global leader of podcasting having international operations and global partnerships across North America, Europe, Asia, and Australia. Moreover, the Company facilitates content to be distributed by Apple Podcasts, Spotify, Pandora, Amazon Music, and other mobile apps. The podcast shows are downloaded more than 98 million times each month by 30 million unique listeners worldwide. In addition, BOOM is ranked as the fourth largest podcast publisher in the US by Triton Digital.

Growth Prospects

• Record Global Downloads: The Company had reached a record download of 107.7 million during September 2021. Furthermore, the average global monthly downloads witnessed a year-on-year growth of around 27% to 99.1 million during Q3 FY21.
• Increased Demand Levels: BOOM had demonstrated increased demand levels with strong pricing because of the start of the US NFL season, Premier League football and the F1 season. Moreover, it had also displayed premium advertising inventory from new major content initiatives announced recently.
• Sustainable Growth in Ad-tech related Revenue: BOOM had shown a decent increase in back catalogue inventory created by Audioboom's proprietary AdRip tool as it gets monetised through the sustained growth in ad-tech related revenue.

  Key Risks

• Loss-Making Nature: The Company has been constantly reporting a net loss for the last five years.
• Macroeconomic Uncertainty: The rising cost of living with inflationary concerns has impacted British consumer confidence.
• Wrong Strategic Choices: The failure of partner relationships could adversely impact the business in the near term.
• Interest Rate Hike: The recent hawkish comments made by the Bank of England regarding a hike in the interest rates could make fundraising difficult for the Company.

Now, we will analyse the Key Fundamental Statistics & Shareholding Pattern of Audioboom Group PLC.   

Candy (Nicholas Anthony Christopher) is the most significant shareholder as it holds nearly 2.27 million shares as of 30 September 2021. 

Q3 FY21 Trading Update (for three months ended 30 September 2021, as of 13 October 2021)

• Record Revenue Growth: The Company’s top-line revenue grew year-on-year at around 161% and quarter-on-quarter by approximately 28% during Q3 FY21. Moreover, the revenue during 9M FY21 increased by approximately 117%.
• Switched into EBITDA Profitability: The Company had reported positive adjusted EBITDA for every month in 2021, with Q3 FY21 adjusted EBITDA of USD 1.0 million.
• Robust Liquidity: BOOM had total liquidity of USD 4.5 million as of 30 September 2021, having a cash balance of USD 1.2 million and an undrawn SPV loan facility of USD 3.3 million as of 30 September 2021.

Share Price Performance Analysis

 (Source: Refinitiv, Research done by Kalkine Group)

On 02 November 2021, at 08:03 AM GMT, BOOM’s shares were trading at GBX 1,125.50, down by around 0.84% from the previous day closing price. Stock 52-week High and Low were 1,155.00 and GBX 160.30, respectively.

From a technical perspective, the MACD line remained above the signal line, indicating an upside potential in the stock price. Moreover, the stock price traded above the 20-days exponential moving average of GBX 1,062.40. Hence, there could be an uptick in the stock price.

Over the last one year, BOOM’s stock price has delivered a positive return of ~556.10%, and it has outperformed the FTSE All-Share Leisure Goods index (benchmark sector) with a return of around 3.40% and FTSE AIM All-Share index (benchmark index) with a return of approximately 29.77%.

Valuation Methodology: EV/Sales Approach (NTM) (Illustrative) 

Business Outlook

BOOM had expected FY21 revenue to remain ahead of the current market expectations and a significantly increased adjusted EBITDA relative to these market expectations. Moreover, the Company had managed to deliver a stellar business performance during Q3 FY21. The content-focused expansion strategy continued to drive download and ad inventory levels to new highs. On an optimistic note, the Company had robust Advertising bookings and pricing for Q4 FY21 along with high demand for the 2022 inventory. Meanwhile, the Company aimed to invest in new sales initiatives regarding advertising marketplace in Q4 FY21. Since it is a penny stock, BOOM may show adverse volatile movements because of several factors such as rising inflation, increasing bond yields, an economic slowdown in China, and the Evergrande fiasco. Thus, it would be advisable for the clients to take a reasonable position on this Company as per their risk-return profile.

Considering the solid operational progress, robust top-line business growth, improved profitability, new launches, and support from the valuation as done using the above method, we have given a “Speculative Buy” recommendation on Audioboom Group PLC at the current price of GBX 1,125.50 (as on 02 November 2021 at 08:03 AM GMT), with lower-double digit upside potential based on 3.94x EV/NTM sales (approx.) on FY22E sales (approx.).

*The reference data in this report has been partly sourced from REFINITIV.

*All forecasted figures and Peer information have been taken from REFINITIV.

*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.

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